Post on 22-Aug-2020
Avianca Holdings S.A.1Q 2019 Earnings Presentation
Disclaimer
The present document consolidates information from Avianca Holdings S.A. and its
subsidiaries, including unaudited financial figures, operational managerial
indicators, financial indicators and managerial projections of future performance,
in line with Avianca Holdings S.A. and its subsidiaries’ business plans. References
to future behaviors are indicative and do not constitute a guarantee of compliance
by the Company, its shareholders or directors. Unaudited accounting and financial
information and projections presented in this document are based on internal data
and calculations made by the Company, which may be subject to changes or
adjustments. Any change in the current economic conditions, the aviation industry,
fuel prices, international markets and external events, among others, may affect
the ongoing business results and future projections.
Avianca Holdings S.A. herein after Avianca Holdings and its subsidiaries warn
investors and potential investors that future projections are not a guarantee of
performance and that actual results may differ materially. Every investor or
potential investor will be responsible for investment decisions taken or not taken
as a result of his or her assessment of the information contained herein. Avianca
Holdings S.A. is not responsible for any fourth parties’ content. Avianca Holdings
may make changes and updates to the information contained herein.
The information, tables and logos contained in this presentation may not be
reproduced without the consent of Avianca Holdings S.A.
TransformingAVH
4
Moving from a growth-focused to a profit-focused company allows AVH to accelerate deleveraging
Adjust the fleet plan to slower growth:
• Drive cost savings through sub-fleet
simplification
• Renegotiate order book
Non-Core Assets Divesting Plan:
• Allows management to focus on core
Business unites
• Demonstrated execution in 2019
Improve operating profit:
• Rationalize network to remove
insufficiently profitable routes
Strategic Initiatives Current Status
35 A320N rescheduled and canceled 17 A320N. This agreement will reduce Avianca’s fleet CapEx
needs by more than $350 million over the next three years.
AVHs BoD authorized the Management to commence negotiate the sale of up to ten (10) Embraer
aircraft.
AVH reduced the services offered within Peru’s domestic aviation market, directing its focus on
international connectivity via Lima’s Jorge Chávez International Airport and keeping the LIM-CUZ
route with 35 weekly frequencies
AVH continues with the strategy which emphasizes route and network profitability by reducing
underperforming flights and ensuring Avianca’s network optimization
AVH has entered into an agreement with CAE Int., for the sale of the Company’s participation in
the training business with flight simulators Avianca-CAE Flight Training
AVH reached a 50% sale agreement for its stake in Getcom Int'l Investments S.L, a
company incorporated in Spain and specialized in Contact Center and BPO services.
5
AVH actively evaluates options to refinance its outstanding 2020 Bond
20-F Format Filing
• On April 29th the company filedits 2018 20-F with the SEC
• In the Risk Factors of the 20FAvianca disclosed theincompliance of its shareholderBRW with certain covenants setforth under the United Loanagreement
Liability Management Transaction
• As Avianca Holdings reported onMay 6, 2019, the BoDauthorized the management ofthe Company on May 2, 2019,to proceed with a liabilitymanagement transaction inrelation to its outstanding8.375% notes due 2020
• Avianca is currently evaluatingthe best alternatives torefinances the outstanding 2020bond
S&P Corporate Downgrade
• S&P Global Ratings took aRating Action on May 13,downgrading Avianca HoldingsS.A. Corporate Credit from “B”to “CCC+”
• The report issued by S&P statesthat Avianca’s plans to refinanceits $550 million seniorunsecured notes has takenlonger than expected
• AVH is actively working toamend certain specificagreements in regards to therisk factors identified under 20F
ExecutiveSummary
1Q 2019
Executive Summary
• Cancelled Routes:• Domestic Peru Capacity• Lima-Mendoza• Bogota-Montevideo• Bogota-Chicago• Bogota-Boston
• US$ 1.15 Billion in
Revenues in 1Q19; -1.5%
YoY
• CASK ex-fuel reached 6.0
US¢ a 6.3% YoY reduction
vs 1Q18
• CASK reached 8.2 US¢ a
4.5% YoY reduction vs
1Q18
• Avianca's Regional
express carrier began
operations allowing the
company to improve the
connectivity within the
Colombian domestic
market
• Cargo business unit
continues focus on yield
improvement
• Transported 11,600’ of
Valentine’s Day flowers,
+5.0% YoY
• Load Factor of 82.1% for
1Q19
• 7.7 million transported
passengers for 1Q19 +4.3%
• Avianca is awarded 2019
Kayak Award for best
airlines, in two categories
for Latin America: • Comfort
• On-Board Entertainment
• Avianca continues with
its non core asset
divesting initiatives
• AVH renegotiated Airbus
Backlog as follows:• Canceling delivery of
17 A320N
• Rescheduling delivery
of 35 A320N
Financial And
Operat ional Results
1Q 2019
9
Embraer 190
ATR 72/42
Cessna 208
Airbus 330
Boeing 787
Airbus 330F
Airbus 300F
Boeing 787F
Out In
Executing on our
fleet plan1Q 2019
Airbus 320
116
8*
17
13*
9
12
5
5
2
190Total Fleet
• The A330pax and A330F from Ocean Air were returned to AV. Subleases finished.
Details
*Note: Avianca plans to phase out its Embraer Fleet, Avianca has signed an agreement to divest its regional Carrier SANSA and LA COSTEÑA
8,7 8,6 9,1 8,6
9,3 9,2
1Q16 1Q17 1Q18 1Q19 2018 LTM
11.504 12.180 12.734
13.811
1Q16 1Q17 1Q18 1Q19
52.624 53.701
2018 LTM
9.060 9.972
10.647 11.341
1Q16 1Q17 1Q18 1Q19
43.730 44.423
2018 LTM
10
ASK growth rate decelerates as Avianca shifts from a growth to profit focused business model
1Q RPKs – Millions 1Q Load Factor
1Q ASKs – Millions 1Q Yield - US¢
+6.5%
-150 bps
+8.5%+2.0%
+1.6%
Quarterly Full Year
78,8%
81,9%83,6%
82,1%83,1% 82,7%
1Q16 1Q17 1Q18 1Q19 2018 LTM
Quarterly Full Year Non-passanger Revenues EBIT/EBITDAR Margin RASK11
2017
2016
Cask and Cask Ex Fuel decrease by 4.8% and 6.8% respectively
1Q Revenues – US millions 1Q EBITDAR – US millions
1Q CASK and CASK ex Fuel - US¢ 1Q EBIT – US millions
8,7 8,8 9,2
8,3
792 862 972 970
213 205
197 180
1Q16 1Q17 1Q18 1Q19
9,3
9,1
4.080 4.079
811 794
2018 LTM
889 832
18,2%
17,1%
2018 LTM
215 216227
17021,4%
20,3% 19,4%
14,7%
1Q16 1Q17 1Q18 1Q19
72 69
76
18
7,2%6,4%
6,5%
1,6%
1Q16 1Q17 1Q18 1Q19
232
175
4,7%
3,6%
2018 LTM
8,1 8,2 8,6 8,2 8,9 8,7
6,7 6,4 6,4 6,0
6,5 6,4
1Q16 1Q17 1Q18 1Q19 2018 LTMCask
Region
Domestic*
Intra Home
Markets1
Home Markets to
North America2
Home Markets to
South America3
Central America &
Caribbean4
Home Markets
to Europe
Total
12
Avianca Holdings S.A. reports a 82.1% Load Factor
1Q19 RPK Growth 1Q19 ASK Growth
*Domestic Market: Colombia, Peru, Ecuador 1 Local Intra-Markets: Colombia, Peru, Ecuador, Salvador, Costa Rica, Guatemala; 2 From Local Markets to North América including México 3 From Colombia, Perú, Ecuador and Costa Rica to Bolivia, Chile, Argentina, Brazil and Uruguay, 4 Belize, Cuba Curazao, Republica Dominicana,
Panamá, Costa Rica, Guatemala, Honduras, Nicaragua
1Q19 Load Factor
81.4%
82.1%
81.7%
84.8%
78.3%
82.4%
RPK 6.6% ASK 8.5% Load Factor 82.1%
5.72%
4.26%
-3.72%
22.32%
3.13%
6.03%
7.89%
3.04%
-6.64%
17.44%
5.60%
3.00%
Copa1.6%
13
1%
Intra-HomeMarkets
Home Markets To North America
Home Markets To South America
Home MarketsTo Spain
Avianca’s market share in the Colombian domestic market recovers from late 2017 ilegal Pilot strike
Colombia Domestic1 Central America
Domestic2
Source: Aeronáutica Civil, MIDT1: Mar-19; 2: Mar-19, Excluding flights from an to Panama; *Domestic Market: Colombia, Peru, Ecuador; Local Intra-Markets: Colombia, Peru, Ecuador, Salvador, Costa Rica, Guatemala; From Local Markets to North América including México 3 From Colombia, Perú, Ecuador and Costa Rica to Bolivia, Chile, Argentina, Brazil ,Uruguay and Venezuela, 4 Belize, Cuba Curazao, Republica Dominicana, Panamá, Costa Rica, Guatemala, Honduras, Nicaragua
Avianca54.6%
Latam18.3%
VivaCo15.1%
Satena4.4%
Easyfly5.3%
Others0.7%
63.9% 25.4%
31.0%
33.3%
Avianca60.3%
Copa37.0%
Others2.6%
Business Units
1Q 2019
15
Avianca Cargo: financial and operational results
Source: Company.
(1) On a per trip basis. (2) Includes consolidated revenues from the cargo operation in Mexico and Deprisa (Other Business Unit) (3) Includes bellies and excludes Colombia domestic operations. Includes commercial agreements with OceanAir Linhas Aereas, not included in official statistics.
(4) International Cargo – Aeronáutica Civil de Colombia (as of Mar 2019) (5) Miami-Dade Aviation Statistics, by airline group (as of Mar 2019)
Segment Overview Key Metrics (Cargo and Courier)
Market Share Colombia (1Q19)4 Market Share Miami (1Q19)5
▪ Strong performance:
• Throughout Valentines day peak season we transported more
than 11,600 Tons of flowers (+ 5% vs 2018)
• 2.4% growth in the volume of cargo transported (vs 2018)
• 7.4% growth in Kg On Board In & Out MIA and 2.4% In & Out
Colombia
▪ Network improvements
• Own operation Consolidation of MIA-BRU-MIA in A330F
RTK (MM)(3)
Revenue (US$MM)(2)ATK (MM) (3)
Load Factor
5.8%
38.4%
9.7%7.8%
5.6% 4.8%
33.7%
AVH Atlas Latam Skylease Cargolux Others
15% 14%12% 11%
08%06%
34%
Atlas Latam AVH UPS Amerijet AmericanAirlines
Others
600.8656.6
1Q18 1Q19
2,487 2,543
2018 LTM
+9.3%
339.4358.9
1Q18 1Q19
1,424 1,444
2018 LTM
56.5% 54.7%
1Q18 1Q19
57.3% 56.8%
2018 LTM
-49 pbs
-1.0%
147.9 139.9
1Q18 1Q19
617.9 611.6
2018 LTM
16
LifeMiles: Loyalty Company
• 1Q19 Gross Billings decreased by 5.2% vs 1Q18:
• Commercial gross billings increased by 8.0% YoY
• Approximately 9.0 million members, +12.0% increase vs. 1Q18
• 515 commercial partners, +48.4% vs 1Q18
• The black-out period related to our new core system cutover in February 2019 resulted in
fewer miles redeemed and a temporary freeze of commercial partner onboarding
New Commercial Partners & Awards
Colombia CAM ROW1
(1) Signed up via Kaligo
Flight Plan 2019
1Q 2019 2019 OUTLOOK
PAX
ASK
LF
4.3%
8.5% 0.0% - 2.0%
82.1% 81.0% – 83.0%
1.6%5.5% – 7.5%
From 7.0% – 9.0%EBIT
0.0% - 2.0%
19
In Summary
Enhance operational efficiency
Adjusted fleet plan will decelerate growth
Divestiture of non-core assets
Re-prioritization of capex investments
Avianca’s transformation is based on moving from a
growth to a profitability focused business model and
we started this process by executing key drivers:
Enhance operational efficiency
Divestiture of non-core assets
Re-prioritization of capex investments
Strengthen the capital structure
Further capacity reductions will drive margin
expansion going forward
Strengthen the capital structure
Thank YouContact Information:
Investor Relations Office
ir@avianca.com
T: (57) 1 – 5877700
www.aviancaholdings.com